Complicated stamp duty question - becoming liable for more stamp duty if getting married

HaveIt

Hi all,

Complicated one for you. I will get proper advice from a solicitor, but thought I'd start here!

I have owned a house with my now ex-wife since 2014 and will do for at least another ten years. It's where my child lives and have no intention of disrupting them even if I could.

In 2024 my partner bought a house which I live in with her, and I pay half of the mortgage on it via JBSP mortgage. Doing it this way meant we could take advantage of first time buyer stamp duty and avoid the 'second property' premium. A significant saving (~£30k).

When we did this, we went into it knowing that there would be stamp duty implications if we were to marry at any point. I believe it was that I'd be liable for stamp duty (inc additional second property %) on the whole property if we got married, but that if we added me to the deeds/mortgage in advance of marriage, then I'd only pay that stamp duty + second property premium on half of the outstanding mortgage value.

Has anyone got any experience of this?

Thanks!

HaveIt

Maybe it's not that complicated. SDLT guidance below. I guess I'd just need to factor in the second home penalty onto the chargeable consideration?

An example of when you pay Stamp Duty Land Tax when no money changes hands

The owner of a property valued at £700,000, with an outstanding mortgage of £600,000, transfers half the property to their partner when they marry in October 2022. Their partner takes on 50% of the mortgage (£300,000).

HMRC charge Stamp Duty Land Tax on the amount paid for a property or the amount of ‘chargeable consideration’ given.

By taking liability for the mortgage, the owner’s partner has given ‘chargeable consideration’ of £300,000 for their share of the property, which is £2,500 Stamp Duty Land Tax (0% of £250,000 + 5% of £50,000).

Bookworm105

HaveIt said:

Maybe it's not that complicated. SDLT guidance below. I guess I'd just need to factor in the second home penalty onto the chargeable consideration?

how did you escape higher rate SDLT in the first place?
With a JBSP mortgage in play have you given written confirmation that you will not get any money back when the property is sold ie in tax terms you have no beneficial interest?
Joint Mortgage Sole Proprietor Stamp Duty | SAM Conveyanicng

it is the acquisition of a beneficial interest that triggers SDLT, and in your case that means being added to the deeds and you no longer waiving your claim to a share of the property. That fact has nothing to do with whether you are married or not at the time of the addition, you are a cohabiting couple, one of whom owns another property. That other property is not your main home, is being retained by you, and thus the home you now live in is an "additional" property that you now own, so attracts the higher rate.

HaveIt

Escaped SDLT by not being on the deeds. I'm a guarantor only with no ownership rights nor even a legal right to live in the property. But I believe as soon as we're married, I gain a beneficial interest. I suppose I'm just wondering if there's any benefit to transferring ownership before marriage but it doesn't appear to be the case.

They really need to update the stamp duty laws to reflect the complexities of divorce and family homes as opposed to holiday homes and BTLs.

SDLT_Geek

HaveIt said:

Hi all,

Complicated one for you. I will get proper advice from a solicitor, but thought I'd start here!

I have owned a house with my now ex-wife since 2014 and will do for at least another ten years. It's where my child lives and have no intention of disrupting them even if I could.

In 2024 my partner bought a house which I live in with her, and I pay half of the mortgage on it via JBSP mortgage. Doing it this way meant we could take advantage of first time buyer stamp duty and avoid the 'second property' premium. A significant saving (~£30k).

When we did this, we went into it knowing that there would be stamp duty implications if we were to marry at any point. I believe it was that I'd be liable for stamp duty (inc additional second property %) on the whole property if we got married, but that if we added me to the deeds/mortgage in advance of marriage, then I'd only pay that stamp duty + second property premium on half of the outstanding mortgage value.

Has anyone got any experience of this?

Thanks!

Am I right in thinking that the property is in England, so the relevant stamp duty is stamp duty land tax?

Some good points have been made in earlier replies.  Here is another point.

Perhaps the "additional property" surcharge for SDLT is not a problem because of the nature of your ownership of the house owned with your ex-wife.  It sounds as if that might be subject to a "property adjustment order".  If so, it does not "count against you" for surcharge purposes.  There is guidance about it here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09797

HaveIt

SDLT_Geek said:

HaveIt said:

Hi all,

Complicated one for you. I will get proper advice from a solicitor, but thought I'd start here!

I have owned a house with my now ex-wife since 2014 and will do for at least another ten years. It's where my child lives and have no intention of disrupting them even if I could.

In 2024 my partner bought a house which I live in with her, and I pay half of the mortgage on it via JBSP mortgage. Doing it this way meant we could take advantage of first time buyer stamp duty and avoid the 'second property' premium. A significant saving (~£30k).

When we did this, we went into it knowing that there would be stamp duty implications if we were to marry at any point. I believe it was that I'd be liable for stamp duty (inc additional second property %) on the whole property if we got married, but that if we added me to the deeds/mortgage in advance of marriage, then I'd only pay that stamp duty + second property premium on half of the outstanding mortgage value.

Has anyone got any experience of this?

Thanks!

Am I right in thinking that the property is in England, so the relevant stamp duty is stamp duty land tax?

Some good points have been made in earlier replies.  Here is another point.

Perhaps the "additional property" surcharge for SDLT is not a problem because of the nature of your ownership of the house owned with your ex-wife.  It sounds as if that might be subject to a "property adjustment order".  If so, it does not "count against you" for surcharge purposes.  There is guidance about it here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09797

Oh wow! Thank you. This could be an absolute gamechanger. Yes, there's a 'Mesher' order in the divorce that means my ex-wife can live there for another 10 years (at least) so I will check but I believe that would help.

Really appreciate your help.

HaveIt

I've checked, and yes!!! That order means I'm not subject to the higher SDLT fee which means £15,615 comes down to just £1,560!!! Incredible! Thank you.

SDLT_Geek

HaveIt said:

I've checked, and yes!!! That order means I'm not subject to the higher SDLT fee which means £15,615 comes down to just £1,560!!! Incredible! Thank you.

Great news.

thefutureism1ne

Really helpful thread of information on stamp duty- thank you

thefutureism1ne

I totally agree!